Laws Governing Contracts


  • common law and code law govern contract formation and performance
  • general contract law rules are derived from the common law
  • common law traditionally applies to contracts for services
  • UCC applies to contracts for goods

Code Law

  • states have enacted statutes that govern certain types of contracts
  • Laws governing the sale of goods are part of the Uniform Commercial Code (UCC)
    • written by the National Conference of Commissioners on Uniform State Laws (NCCUSL)
      • works to develop uniform state laws
      • existence since 1892
      • Each state appoints commissioners to work on draft model laws
    • took 10 years to write
    • is a model law that states can adopt
    • states may amend portions of the UCC when they adopt it
    • does not cover every aspect of contract law
  • Many parts of contract law are left to each state’s common law

Common Law

  • The Restatement (Second) of the Law of Contracts summarizes the common law rules
    • a treatise on common law contract rules prepared by the American Law Institute (ALI)
      • is a group of highly distinguished judges, lawyers, and legal scholars who review cases on a certain type of law, then compile the principles stated in those cases into a series of rules
      • rules are not binding authority on a court the way statutes or court rulings are
      • offer guidance on identifying the common law